James Palmer, NHS England’s clinical director for specialised services, said the price the health service would pay for new medicines would be “different to what we’ve experienced in the last few years” and “decreasing”.

He said the prioritisation of out of hospital care by the NHS would mean “significant growth” in funding for specialised drugs “is not going to happen”. Mr Palmer was speaking at the IMS Health UK Market Access Summit on Monday, LGC’s sister title Health Service Journal reported.

Mr Palmer said NHS England had forecast an annual cost increase for drugs in specialised services of 11 per cent, rising from £2.4bn in 2013-14 to £4.5bn in 2019-20, mainly due to price growth.

The clinical director said it was unlikely the NHS would be able to afford this growth, because it was prioritising out of hospital care.

Mr Palmer said the focus in the next few years would be “making sure primary care works, making sure community care works, in order to keep the system going”.

“I think the chances of specialised services having a significant growth allocation of money, to deal with the 11 per cent growth at least in drugs, is not going to happen.”

“We can’t afford everything, and there will be drugs and treatments that we can’t afford,” he said.

He told his audience of pharmaceutical industry insiders that this would change what they “plan to bring forward to the market”.

Explaining the focus on primary and community services, Mr Palmer said: “The reality of my work as a neurosurgeon is that the problem isn’t access to drugs, it’s access to beds, because the system is getting really broken.”

Mr Palmer also said specialised services did not “get back any money… to spend on new products” from payments made by drugs companies to the NHS under the current pharmaceutical price regulation scheme. This money, the use of which has been controversial in the sector, went “back into the Department of Health” and helped “the baseline position of NHS England”, he said.

Specialised Healthcare Alliance director John Murray, responding to the comments, told LGC’s sister title Health Service Journal Mr Palmer had made a “false distinction” between out of hospital care and specialised services.

“An awful lot of specialised services are delivered in and close to people’s homes.

“The objective should be to increase that proportion over time as part of the Five Year Forward View,” Mr Murray said.

He added there needed to be “investment in specialised services” if the government was to achieve its goal of making the NHS a “global leader” in health innovation.

Association of the British Pharmaceutical Industry commercial director Alison Clough said that while the “issue of affordability remains an important topic”, the industry believed this was being addressed through the PPRS.

“Last month the ABPI announced a payment of £207m from industry to the DH under the current PPRS to underwrite growth of the medicines bill for the first quarter of 2015.

“We believe that this money should allow clinicians to prescribe the medicines they believe are right for patients without undue focus on cost,” she said.

The lifting of the housing revenue account borrowing cap has been lauded as one of the most significant developments for the sector in recent times. But experts have warned that this move alone is unlikely to lead to a revolution in housebuilding.

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